Fears of US Government Shutdown as Chicken Debt Ceiling Game Begins | American politics
Top Democrats are expected to challenge Republicans to block an interim financing measure, which would trigger the double-barreled US budget crisis defaulting on its mammoth debt and a federal government shutdown, say two sources close to it of the proposal.
The plan envisioned by House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer is to suspend the debt ceiling after the 2022 midterm election. in an interim bill that would keep the government funded until early December, the sources said.
Democrats then want to challenge Republicans to block the interim financing measure with an obstruction and prevent it from receiving the 60 votes needed to pass the Senate – which could cause a government shutdown on October 1 and leave the States – United unable to pay their bills.
The United States has almost always avoided defaults and the sources said they expected a resolution on this occasion as well, although negotiations, like in previous years, continued until the eleventh hour. .
But economists say a failure to raise or suspend the debt limit when tied to the interim financing measure would be particularly catastrophic, as the United States would be unable to repay its debts amid a government. federal potentially non-functional.
Resolving the impasse – which typically turns into political football under a Democratic president as Republicans criticize their spending – now requires a party to blink.
The strategy to tie the potentially catastrophic prospect of the United States defaulting on its $ 28 billion debt to a government shutdown could put Republicans in a difficult position after their repeated refusal to raise the debt limit in any way. bipartite.
It also underscores the extent of congressional dysfunction, as Republicans refuse to support measures ranging from voting rights legislation to police reform to a 9/11-style commission to investigate the attack. murder of January 6 against the Capitol.
The high-stakes debt ceiling clash is gaining momentum after Treasury Secretary Janet Yellen recently said the United States could default in mid-October and cause “irreparable damage” to the debt. economy if Congress does not take action.
In a letter to PelosiYellen said the extraordinary measures the Treasury Department used to fund the government on a temporary basis after the country’s debt hit its legal limit on August 1 would be exhausted next month.
“Once all available measures and available liquidity are completely exhausted, the United States of America would not be able to meet its obligations for the first time in our history,” Yellen wrote.
This collapse could affect the credit rating of the United States, raising the specter of an increase in Treasury interest rates, which could cost the government billions and lead to increased borrowing costs for businesses. American rates, since their rates are compared to Treasury rates.
Democrats have insisted for months that Republicans join them in taking action on the debt ceiling, arguing that the national debt is mainly because of Republicans. increased by approximately $ 8 billion during the Trump administration.
Pelosi added at a recent press conference that the need to suspend the debt ceiling stemmed in part from Republican tax cuts for the rich. “We’re paying the credit card, the Trump credit card,” Pelosi said.
But Republican Senate Leader Mitch McConnell has remained adamant that Republicans will not support Democrats in raising the debt ceiling as part of a stand-alone bill, and that it should be included instead. in a vast infrastructure package that can be adopted by a party. online voting.
“Let’s be clear,” McConnell said in a tweet Wednesday. “With a Democratic President, a Democratic House, and a Democratic Senate, Democrats have all the tools they need to raise the debt ceiling. It is their sole responsibility. “
Pelosi and Schumer also noted that Democrats joined Republicans in handling the debt limit when Trump was president and believe Republicans should now reciprocate – rather than leaving vulnerable Democrats open to ad attacks if the cap is. noted in a party line vote. .
Emphasizing the point, Pelosi said Democrats would not include a provision to raise the debt ceiling in the $ 3.5 billion budget resolution for Biden’s infrastructure program they had been seeking. ‘intention to adopt with the reconciliation process, in order to avoid obstruction.
Instead, the Main Democrats are moving forward with a plan to add such language to the interim funding measure that would keep the government funded until Dec. 3 or Dec. 10, the sources said, and hope persuade 10 Senate Republicans to support the bill.
The inclusion of the debt limit in the interim measure is not final, the sources warned, and discussions will continue when the House returns from a summer recess. It could always be added to a disaster relief bill, for example, or be addressed in a stand-alone bill.
Part of the concern of Main Democrats is that the path to 60 votes in the Senate was significantly reduced last month after the Senate Republican Conference majority signed a letter promising to block any bills that attempt to raise the debt ceiling.
Only four Senate Republicans – Senate Appropriations Committee Chairman Richard Shelby, Lisa Murkowski, Susan Collins and John Kennedy – refused to sign the letter, a number well below the threshold required to defeat an expected filibuster.